Possible Investment Objectives May Include

question 16

Multiple Choice

Possible investment objectives may include
1. capacity to meet financial emergencies
2. preservation of capital
3. desire to finance retirement

• A)1 and 2
• B)1 and 3
• C)2 and 3
• D)all of the above

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Definitions:

Inventory Turnover

A ratio indicating how many times a company's inventory is sold and replaced over a specific period.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of a business.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term and long-term obligations, calculated as current assets divided by current liabilities.

Acid-test Ratio

A financial metric that measures a company's ability to pay off its current liabilities with its most liquid assets without relying on the sale of inventory.